Container spot freight rates registered a marginal increase at the start of the year, but now sit below the 10-year average according to Drewry.

Drewry’s composite World Container Index (WCI) rose 0.7% in the week ended 5 January 2023, ending 43 weeks of consecutive falls in the index.

The WCI now stands at $2,135 per feu having plunged 79% from a high of $10,377 per feu in September 2021. The index is now lower than the 10-year average of $2,694 per feu which Drewry said indicated a return to normal price

The 0.7% rise in the WCI reflected a mix of both increases and decreases in spot rates on major trades – Shanghai to Rotterdam gained 10% to $1,874 per feu, while Shanghai to New York fell 3% to $3,788 per feu.

“Drewry expects small week-on-week reductions in rates in the next few weeks,” the analyst commented.

The big question now is how quickly and sharply the plunge in spot rates will feed into contract rates which are now much higher than spot rates.

Xeneta commented in a weekly update: “Across all three of these main fronthaul trades, the difference between spot and contract rates switched. At the end of 2021, long-term rates on these trades were at $4,300 per feu, lower than spot rates on average, to be $4,450 per feu more expensive. At the end of 2022, the Far East to North Europe trade had the largest spread, $4,900 per feu, between spot and contract rates.”

Xenata said compared to December 2021 only longer-term rates to North Europe fell by 19%, while Asia to the US West Coast contract rates were up 0.3% and Asia – US East Coast up 8.1%, in part reflecting the contracting periods.